Oliver Wyman advises on setup of National Wealth Fund

Strategy consultancy Oliver Wyman has been contracted to advise a taskforce on the creation of a National Wealth Fund. With public funds said to be running low, the new government hopes that the fund will be able to mobilise private capital to meet the demands of the country’s sustainability transformation in the coming years.

Oliver Wyman is undergoing a meteoric rise in the strategy consulting market. The Marsh McLennan-owned advisory firm saw annual GAAP revenues – revenue is recognised on the income statement in the period when realised and earned – of $3.12 billion in the 2023 financial year. That was a rise of 12% on the previous haul of $2.79 billion in its 2022 financial year – which was itself the result of 10% growth.

Driving that accelerating growth have been a number of heavyweight contract wins for Oliver Wyman. This included the London Metal Exchange hiring Oliver Wyman to review its nickel trading, and most famously, the firm was also able to beat off competition from the MBB to take on a landmark strategy and integration gig with UBS and Credit Suisse. In the time since, the firm’s CEO has since even been in demand from the President of Ukraine.

Now, Oliver Wyman has announced another successful engagement, which will add further prestige to its client base. The consultancy has been tapped by the new UK government to weigh up the creation of a National Wealth Fund (NWF) – a priority of the recently elected Labour administration.

The Climate Change Committee has called for £50 billion of investment a year between 2030 and 2050. But Labour Chancellor Rachel Reeves stressed long before the party approached 10 Downing Street that public funds were running low. To help bridge this gap, the government is instead committed to attracting significant investment from the private sector – by creating an NWF as a way of mobilising business investment to fund the UK’s transition to a low-carbon economy.

To help bring this to life – creating green jobs and driving growth across the UK – Oliver Wyman’s government and public institutions practice in the UK was tapped to work with the Green Finance Institute and National Wealth Fund Taskforce. Advising the groups on the plans, Oliver Wyman concluded that it would help address net-zero issues in the UK – as “when directly supported by policy, public capital investment can take on risks that private capital alone cannot.”

This offers potential returns for the fund, and a clear path to mobilise large-scale private capital, motivated by those potential profits. Illustrating this, the government has already committed to provide £7.3 billion of public capital to underwrite the fund. Meanwhile, to attract private capital, it will have to weigh up “the right combination of policy, regulation, tax, and subsidy” according to Oliver Wyman.

At the same time, the experts argued the NWF would need to have its independence from government assured. As well as operating at arms-length from the government with an “independent investment committee with credibility and a track record in the market”, this will also necessitate deploying the NWF’s capital via existing finance architecture. Rather than re-inventing the wheel inhouse, the organisation would save time and money by being deployed via existing organisations in the UK development finance space.

The researchers added, “The NWF must be empowered to deploy catalytic capital with higher levels of risk appetite against a broad, strategic investment mandate, aligned with government priorities to maximise flexibility and allow the NWF to respond innovatively and with agility to the challenges and opportunities of different sectoral transitions.”